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Bruce Lazenby President & CEO [email protected] Financial Management Systems for Small and Medium Size Governments. Grice Mulligan Director, Global Solutions [email protected] Agenda. What is the Problem? Who is FreeBalance? Key Challenges Three Case Studies

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Bruce lazenby president ceo blazenby@freebalance com l.jpg
Bruce LazenbyPresident & [email protected]

Financial Management Systems for Small and Medium Size Governments

Grice MulliganDirector, Global [email protected]

Agenda l.jpg

  • What is the Problem?

  • Who is FreeBalance?

  • Key Challenges

  • Three Case Studies

  • Lessons Learned

  • Critical Success Factors

  • Conclusions

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What is the Problem?

  • Management of Funds

    • Before a government can develop sustainable sources of financing, they need a means of managing, accounting for, and reporting on the funds entrusted to the government.

  • Urgency

    • Given the international economic slowdown and repeated crisis, countries have an urgent need to better manage money in order to create and operate an effective government

  • Window of Opportunity

    • Narrow window of opportunity to establish credibility in the eyes of its citizens, donors, creditors, trading partners and foreign investors

  • International Standards

    • Software must meet multiple accounting and reporting needs – WB TRM, IMF COFOG, IAS, GAAP, best-practices, donors, creditors, unique-to-country

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FreeBalance Mission

“To create world-class, off-the-shelf software that automates the core financial business processes of Governments around the world.”

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FreeBalance Inc.

  • Founded 1984

  • Over 60 Government organizations worldwide

  • FreeBalance eFinancials version 4.5

  • FreeBalance eGrants version 2.0b

  • Institutionally backed

  • Ottawa, Gatineau, Washington, Pristina

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Management Team

Don Gibbons, CFO

Bruce Lazenby, President/CEO

30 Years experience. Managed international systems for Canada’s largest Federal Department. Managed $13 billion of expenditures and $375 million of revenue.

20 years experience dealing with corporate restructuring, acquisitions, divestitures and financing. 10 years as CIBC investment banker in Canada and Asia.

Cuong Nguyen, VP Product Dev.

Gordon Graham, VP Marketing

25 years senior management and technology experience. Former VP, Engineering at Watchfire - built engineering team from 4 to more than 60. Was VP and CTO of company that had successful IPO in 1996.

18 years experience in sales, marketing and business development at Burntsand, Choreo Systems, ObjecTime and DEC. Extensive experience in product development and in establishing strategic relationships.

Mike McTaggart, VP Operations

John McCarthy, VP Sales

Over 25 years of experience in information systems, professional services and enterprise solutions. Hummingbird, PCDocs, Megalith, and Provenance. Previously established partnerships IBM, SAIC, PWC, and EDS.

Over 20 years government related experience. Former President of AMS Canada. Launched AMS eBusiness solutions and services to government and telecommunications sectors.

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What We Offer

FreeBalance eFinancials™

  • Public Sector Financial, Accounting, Treasury & Material Management System

  • Budget and Manager-Centric

  • Best in Class

    • Government Design – Ensures Ease of Use, Comprehension

    • Proven Rapid Deployment Methodology

    • Parameterization – Reduces Maintenance and Support Costs

    • Post-Deployment Sustainability

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Key Challenges

  • Complexity of System

    • The complexity of the solution must be appropriate. All governments require sophisticated government-focused functionality – nothing less – and nothing more

  • Modern System

    • All government financial management solutions should be based on proven, first-world software applications. The system must operate on-line in real time, and be affordable, sustainable and upgradeable

  • Localization and Capacity Building

    • System must be delivered and localized rapidly, and be understandable and easy to use

  • Sustainability

    • Customization will accelerate system obsolescence, cost and likelihood of failure –proven audit support

    • In-country support

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Case Studies

  • Kosovo

  • East Timor

  • Afghanistan

Focus on three key international projects:

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FreeBalance in Kosovo

Key Kosovo Requirements:

  • Financial management system to help democratic development and economic liberalization

  • Technology to ensure sound fiscal management and strengthen transparency and good governance

  • Protect the integrity of the revenue raising and expenditure process (donor confidence)

  • User training and implementation support

  • Local capacity building and sustainability

  • Translation of system into Albanian and Serbian


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FreeBalance in Kosovo

Pictures taken in Pristina by FreeBalance in May 2001

Serbian Police Station

5 blocks from FreeBalance offices

Restaurant in Pristina

2 blocks from

FreeBalance offices

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FreeBalance in Kosovo

Rapid Deployment of FreeBalance eFinancials:

  • Install the system 8 May 2000

  • Configure the Chart of Accounts

  • Configure the Financial Coding Blocks

  • Enter supporting table elements (vendors, bank accounts, etc.)

  • Configure the management rules

  • Enter test transactions, produce test reports

  • Enter live transactions, produce live reports

  • Prove live system to donors on 3 June 2000 (26 days prep to proof)

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FreeBalance in East Timor

“FreeBalance’s software brings along with it internationally approved accounting practices and transparency, which otherwise take a long time to develop in such economies.”

(East Timor Ministry of Finance)

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FreeBalance in East Timor

Brief Background

  • Decades of violence and civil unrest due to struggle for independence

  • UNTAET was established in October 1999 to administer the Territory

  • As of April 2002, UNTAET strength was 7,687 total uniformed personnel, including 6,281 troops, 1,288 civilian police and 118 military observers; UNTAET also included 737 international civilian personnel and 1,745 local civilian staff.

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FreeBalance in East Timor

The UNTAET Mandate:

  • Provide security and maintain law and order

  • Establish an effective administration

  • Assist in the development of civil and social services

  • Ensure the coordination and delivery of humanitarian assistance, rehabilitation of humanitarian assistance, rehabilitation and development assistance

  • Support capacity-building for self-government

  • Assist in the establishment of conditions for sustainable development

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FreeBalance in East Timor

FreeBalance Project:

  • FreeBalance provided financial management software and related services (Dili, East Timor)

  • Funded by the World Bank and delivered to the Central Fiscal Authority of East Timor (CFA)

  • FreeBalance eFinancials implementation began in September 2000 (Foundation)

  • System went live in less than 45 days

  • Phase II extended the CFA project to Agencies and Departments of the East Timor Transitional Administration

  • East Timor celebrated Independence Day on May 20th 2002

  • Additional modules being rolled out

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FreeBalance in Afghanistan

“If FreeBalance can help bring fiscal stability to Afghanistan’s beleaguered government, it will have accomplished not just a business coup, but a kind of miracle.”

(Canadian Business Magazine, December 2002)

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FreeBalance in Afghanistan

  • Financial management software and services for the Transitional Islamic Government of Afghanistan

  • Arrived in Country 9 October 2002 – system live and first check cut 24 October 2002 (15 days prep to proof)

  • Project to be rolled out in two phases over the course of five months

  • FreeBalance and BearingPoint will implement FreeBalance eFinancials and provide associated professional services

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FreeBalance in Afghanistan

Pictures taken in Kabul in October 2002

Views from Ministry of Finance office

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Lessons Learned

  • Think big but start small

    • Go live fast and scale up

  • Solve problems and show progress

    • Get people and systems into production quickly

  • Improve donor coordination for leverage

    • Success breeds success

  • Parameterization is key

    • Avoids costs and creates sustainability in the longer term

  • Local ownership and capacity building

    • What is doable for sustainability?

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Critical Success Factors

Let’s assume the major vendors meet the accounting requirements...

That’s not the key to a successful solution.

What they do is the same –

How they do it makes all the difference.

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Critical Success Factors

  • Deliverable

  • Understandable

  • Affordable

  • Sustainable

  • Extensible

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Critical Success Factors

  • Deliverable

    • The system must scale down for a rapid start and scale up for a complete solution to multiple Departments and multiple levels.

    • A truly integrated modular approach.

    • Go live in 60 days – with a configured-for-you solution (not “vanilla”)

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Critical Success Factors

  • Understandable

    • Full Government functionality requires hundreds of tables and rules, not thousands

    • Managers must be able to understand and actually use, maintain, and leverage its functionality to develop and enforce sound, effective, efficient government financial management practices across ministries and functions, at all levels

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Critical Success Factors

  • Affordable

    • Every customer is different and the software needs to reflect this reality.

    • Parameterization is key. Not custom work.

    • Downstream costs associated with customization and unnecessary processes can be debilitating for any institution.

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Critical Success Factors

  • Sustainable

    • An enduring solution must be supported and maintained by local solution providers for first and second level support services.

    • The system must be a long-term solution.

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Critical Success Factors

  • Extensible

    • The solution must be able to grow as government requirements evolve and new eGovernment technologies emerge (eGrants, ePermits, eLicenses, etc.)

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Critical Success Factors

  • Deliverable

  • Understandable

  • Affordable

  • Sustainable

  • Extensible

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  • Both internal stakeholders (political decision-makers, taxpayers) and external stakeholders (lending agencies, donor nations) demand ever increasing control, audit and reporting.

  • These days you cannot achieve the standard required without some sophisticated software, but you also can’t afford $10’s of millions and a 2-year installation schedule.

  • The solution has to be world-class, purpose-built software that is designed exclusively for Government.


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Bruce LazenbyPresident & [email protected]

Grice MulliganDirector, Global [email protected]